Official Says Cambodia Not Ready for Asean Free Trade

Cambodia is not prepared to join Asean’s single regional market and production base next year, a Labor Ministry official said Friday.

Next year, the 10 nations of Asean are to create the Asean Economic Community (AEC). Within this community, labor is to flow freely and import taxes are to drop to zero. Cambodia will likely become one of the members that will benefit the least, said participants of a regional forum, “Labor rights and preparation of 2015 ASEAN Community.”

“If you talk about short-term: Yes, we are not ready,” to join the AEC next year, Chuop Narath, deputy director of the department of employment and manpower at the Ministry of Labor, said on the sidelines of the forum.

“For the long-term, we have to learn how to compete,” Mr. Narath said.

Asked whether Cambodia should ask Asean to defer the creation of the AEC, Mr. Narath said that this was not up to him. “This is up to our leader to decide. Maybe the Ministry of Foreign Affairs or some other top leaders can see if [it can be delayed].”

According to an internal scorecard, Asean’s implementation rate of targets that need to be achieved to create the AEC slowed from 79 percent in August to 72 percent in December.

In February, Asean’s economy ministers reaffirmed their commitment to achieve the economic community next year.

Big development gaps between the region’s richest and poorest countries create hurdles for forging a single economy. The poorest countries include Cambodia, Laos and Burma.

Asean’s richest country, Singapore, ranks third on the World Bank’s GDP per capita index from 2013. Thailand ranks 92, while Cambodia can be found at rank 147, behind Laos at 141.

Ideally, allowing skilled and unskilled workers to freely move from one AEC member state to another would benefit the whole region. It would allow the exchange of experience and skills.

For Cambodia, mainly skilled youth would benefit by having the opportunity to gather work experience abroad, Mr. Narath said. But he cautioned the audience, largely of students, not to rely on getting jobs abroad. Other than that, he said, it was unlikely that Cambodia would see positive impacts in terms of labor movement.

“It’s demand and supply,” he said. “Professionals from other countries will come to Cambodia only if they get the same as in other countries. If you need them, you have to pay them the same… dentists, accountants, if you don’t give them the same salary as Singapore or Malaysia, you cannot get good professionals.”

The private sector has to start increasing wages, he said, adding that it was not the government’s obligation to set a minimum wage, “only to help negotiate,” between unions and companies.

Ya Navuth, executive director of Coordination of Action Research on AIDS and Mobility (CARAM), said that the free flow of labor holds more dangers than opportunities for Cambodia.

He predicted that Cambodia would experience a big outflow of farmers and other unskilled laborers, as well as educated professionals.

“Malaysia and Singapore have a minimum wage,” Mr. Navuth said. “If the [Cambodian] private sector doesn’t increase wages, there will be a flow to countries where [wages] are better—both skilled and unskilled labor.”

About 400,000 Cambodians, mostly farmers without education, currently work in Thailand, where wages are higher, he said.

University students in the audience on Friday also expressed concern over their competitiveness and future in the job market.

“The university teaches us theory, but no skills,” one student said.

Mr. Narath from the Ministry of Labor said that students were to blame themselves as most of them wanted to become managers.

“Construction is dirty but the income is very high, sometimes $2,000 to $3,000,” he said, naming agriculture as another sector with good job perspectives. “We would like to change the views of the youth.”

“I advise students to change their behavior and concept,” Mr. Narath said. “Study how to raise animals for a high income. That’s a priority.”

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